Countries with net-zero pledges form majority of coal consumers: Report

Immediate policy action to rapidly mobilise massive financing for clean energy alternatives to coal and to ensure secure, affordable and fair transitions, especially in developing economies, are needed, says the IEA report 

Nearly 75 countries, representing 95% of current global coal consumption, have made net-zero emissions pledges, according to a report by the International Energy Agency (IEA). However, far from declining, global coal demand has been stable at near record highs for the past decade. If nothing is done, the report warned, emissions from existing coal assets would, by themselves, tip the world beyond the 1.5°C limit.

“Coal is both the single-biggest source of CO2 emissions from energy and the single biggest source of electricity generation worldwide, which highlights the harm it is doing to our climate and the huge challenge of replacing it rapidly while ensuring energy security,” said Fatih Birol, executive director, EIA. 

The report also found that the momentum behind natural gas growth in developing economies is slower than previously thought, notably in South and Southeast Asia, putting a dent in the credentials of gas as a transition fuel. By the 2030s in the EIA’s Announced Pledges Scenario (APS), natural gas demand in emerging and developing economies already starts to fall back.

The report clarified that there is no one single approach to putting coal emissions into decline. Countries where coal dependency is high and transitions are likely to be most challenging are Indonesia, Mongolia, China, Vietnam, India and South Africa. 

According to the report, today there are around 9,000 coal-fired power plants around the world, representing 2,185 gigawatts of capacity. Their age profile varies widely by region, from an average of over 40 years in the US to less than 15 years in developing economies in Asia. Industrial facilities using coal are similarly long lived, with investment decisions set to be made this decade that, to a large degree, will shape the outlook for coal use in heavy industry for decades to come.

If operated for typical lifetimes and utilisation rates, the existing worldwide coal-fired fleet, excluding under-construction plants, would emit more than the historical emissions to date of all coal plants that have ever operated, found the report. 

“While there is encouraging momentum towards expanding clean energy in many governments’ policy responses to the current energy crisis, a major unresolved problem is how to deal with the massive amount of existing coal assets worldwide,” added Birol.  

The report shared what it would take to bring down global coal emissions rapidly enough to meet international climate goals, while supporting energy security and economic growth. It also addressed the social and employment consequences of the changes involved. 

Every future pathway for the global energy sector that avoids severe impacts from climate change involves early and significant reductions in coal-related emissions. All three scenarios modelled in the report see a decline in coal demand within this decade. IEA’s Announced Pledges Scenario (APS) assume all net zero pledges announced by governments are met on time and in full. In the APS, global coal demand falls 70% by mid‐century, alongside declines in oil and gas of around 40%. In the net-zero emissions scenario, global coal use falls by 90% by 2050, and the global power sector is completely decarbonised in advanced economies by 2035, and worldwide by 2040.

The report emphasised that an important condition to reduce coal emissions is to stop adding new unabated coal-fired assets into power systems. New project approvals have slowed dramatically over the past decade, but there is a risk that today’s energy crisis fosters a new readiness to approve coal-fired power plants, especially given the report’s finding that around half of the 100 financial institutions that have supported coal-related projects since 2010 have not made any commitments to restrict such financing, and a further 20% have made only relatively weak pledges.

Further, the governments can provide incentives for asset owners to adapt to the transition. Favourable economics for clean electricity generation, on their own, will not be enough to secure a rapid transition away from coal for power generation. 

International collaboration, public financial support and well-designed approaches that incorporate the need for people-centred transitions will be essential in the move away from unabated coal, said the report. 

An energy transition will create millions of clean energy jobs, although not necessarily in the same places as the coal jobs that are lost, and the required skills in many cases can be different. While it is unlikely to absorb all of the employment lost in the coal sector, the report suggested that critical mineral mining can provide new industrial opportunities and revenue sources for companies and communities hitherto dependent on coal. 

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